China’s financial system must ‘adapt accordingly’ to cope with population, tech headwinds amid economic transition
- China’s under pressure economy is faced with a rapidly ageing society and looming population peak, as well as a technology rivalry with the West
- People’s Bank of China adviser Wang Yiming believes more sustainable financial support and new financial tools are required
More financial adjustments will be needed to counter headwinds over the long run as China’s economy faces demographic challenges and a heightened technology rivalry with the West, according to a Chinese central bank adviser.
“In longer term, China is still in the process of transitioning from high to medium economic growth, so the financial system will have to adapt accordingly,” said Wang, who is a member of the Monetary Policy Committee at the People’s Bank of China (PBOC).
Wang highlighted the risk management within the country’s financial sectors as one of the crucial roles in the long-term adjustment.
The original financial model of supporting traditional industry … needs to be adjusted to improve the ability to respond to the risk
As traditional industry faces slowing growth, especially after the coronavirus, Wang said that financial risk will “gradually expose” in some sectors, urging banks to identify danger “in a more granular way”.